"We will never go back to the 17 per cent interest rates under
this Government," he told reporters in Sydney.

"[Home ownership] should always be something which is kept
within the reach of Australians on modest incomes."

Asked if the Government should look at measures to redirect more
investment out of the housing sector, Mr Howard said: "Housing is
very important to the Australian family.

"Having a home is the core often of family stability and family
unity and I will always place a very high premium on home
ownership."

Economists expect the RBA will decide to lift rates when the
board next meets on March 1 and 2, and it could possibly be
followed by another rise in April or May.

Mr Howard said he agreed with most of the recommendations made
yesterday by Mr Macfarlane, who called for sweeping economic
reform.

"I agree with labour market reform," he said.

"I think we do have some supply bottle necks. We do have a
shortage of skills, that was addressed in the election campaign. We
do need to get people off welfare, back into work.

"We have been trying to reform the disability pension
scheme.

"So just about everything that the governor mentioned yesterday
is on the Government's reform agenda."

The Prime Minister's remarks came as the Federal Opposition
blamed the Howard Government's pre-election spending
spree and ongoing complacency for mounting pressure on interest
rates.

Labor's treasury spokesman Wayne Swan said if interest rates
rise, the Prime Minister will have broken his election promise to
the Australian public.

"People have a right to feel gutted and that he's broken his
commitment," he said.

Mr Swan was visiting a new housing estate at Fitzgibbon, about
35 minutes north of Brisbane, to highlight the impact any interest
rate rise could have on younger people trying to enter the housing
market.

"It's getting harder for first home buyers to get a leg up,"
said Mr Swan, who is the federal member for the north-east Brisbane
seat of Lilly.

"Taking out a loan for $300,000 will mean an extra $48 per month
if we have a quarter of a per cent interest rate rise. If it's half
a per cent, that's an extra $100 a month."

Mr Swan said while the RBA sets the interest rates, it was the
Howard Government's policies which had put pressure on rates.

"It's the complacency of the Government, the fuel crisis, their
failure to deal with infrastructure and ... the spending splurge
leading up to and during the election. All of these things have
combined to put pressure on rates," he said.

The last time the RBA lifted official rates was in December
2003, when they rose by a quarter of a percentage point to 5.25 per
cent.